Typhoons disrupt mining firms' operations

By Neil Jerome C. Morales, BusinessWorld

Posted at Oct 15 2009 12:37 AM | Updated as of Oct 15 2009 10:25 PM

MANILA - Activities of mining companies in northern Luzon were hampered by the closure of major roads and the disruption in communication services and power supply last week, government and industry officials said.

Still, the damage caused by typhoon Pepeng on mining regions like the Cordilleras and Cagayan Valley was considered by a government official as "minimal."

"In parts of northern Luzon, electricity was cut off," Horacio C. Ramos, director of the Environment department’s Mines and Geosciences Bureau, said in a phone interview. "Aside from that, there was a problem in access [to mining areas]."

Benjamin Philip G. Romualdez, president of the Chamber of Mines of the Philippines, concurred. "The problem is also the neighboring communities," he said in a separate phone interview. "The work force was affected," he added.

Marcos Highway and Naguillan Road were partially opened on Tuesday after landslides damaged the access roads and isolated Cordillera from the rest of the country last week.

In Benguet province, listed Lepanto Consolidated Mining Co. experienced a power outage after two transformers collapsed, Mr. Ramos said. "For Lepanto, since last week they had no operations."

Lepanto had to suspend operations because National Power Corp.’s two transmission towers serving Mankayan town were damaged by the typhoon, Lepanto vice-president Odette A. Javier told the stock exchange yesterday.

The miner commercially operates at the Victoria and Teresa gold deposits in the municipality of Mankayan.

Astro C. del Castillo, managing director of brokerage firm First Grade Holdings, Inc., said the suspension of operations would likely affect the revenues of Lepanto.

"I think they can eventually cope," he said yesterday, adding that the miner might earn more given an expected increase in gold prices in the world market.

Meanwhile, communication lines were down in the Macawiwili gold project of listed Omico Corp.

"We lost contact and power in the mine site," Omico president Tommy K.H. Tia said in a separate phone interview. "We have yet to contact our personnel."

Omico is preparing for a $5.45-million exploration project in its 837-hectare Macawiwili gold and copper site in the municipality of Itogon.

Operations of listed Philex Mining Corp.’s Padcal gold and copper mine, which is adjacent to the Macawiwili project, were not affected despite heavy rains.

"Our operations are normal," Philex president Jose Ernesto C. Villaluna, Jr., said in a phone interview.

"We still have enough storage for our copper concentrates, enough for six more days," he added.

Philex Mining, the country’s biggest miner, produces 600,000-700,000 metric tons of gold and copper ores monthly, which are shipped to Japan.

In Isabela, nickel mining activities of listed Geograce Resources Phils., Inc. were put on hold because of the weather.

"We stopped operations because we cannot do anything with heavy rains," Carl C. Ng, vice-president for investor relations of Geograce, said.

Geograce Resources has exclusive rights to operate a 45- and 60-hectare nickel property in the municipality of Dinapigue in Isabela.

Typhoon Pepeng lingered in northern Luzon last week, hitting land three times before leaving at the weekend. Heavy rains forced dams to release water, flooding provinces in central and northern Luzon.